COLLECTED WISDOM™ On 401k Hardship Withdrawals

Hardship distributions are a valuable component of many 401k retirement plans. They encourage participation in the plan and provide a sense of security to participants as they seek a balance between retirement savings and current financial needs. But plan sponsors need to know the rules and administer hardship withdrawals carefully.

Hardship Withdrawals: An Overview - Summary: A good basic overview on the issue. Located on: 401khelpcenter.com. Click on headline for full article.

Hardship Distributions: Lost Retirement Savings or Safety Valve for Employees? - Summary: Hardship distribution provisions in 401(k) plans used to be one of those matters on which plan sponsors didn't spend a whole lot of time. But because of the economy, that's not the case anymore. As a result, two points of view about hardship distributions have evolved. Located at: Employee Benefit News (free registration may be required), February 2010. Click on headline to read full article.

Loans Vs. Hardship Withdrawals: Penalties And Taxes - Summary: There are three ways that cash can be taken out from a 401k account: A regular 401k loan, hardship or non-financial hardship withdrawal. Each is explained in this article with the applicable provisions. Located at: Istockanalyst.com, November 2009. Click on headline for full article.

FAQs Regarding Hardship Distributions - Summary: This FAQ is provided by the IRS as a general guide and overview regarding hardship distributions from 401k plans. Located at: IRS, April 2009. Click on headline for full article.

Hard Times Mean More 401k Hardship Distributions - Summary: Hardship distribution provisions in 401k used to be one of those retirement plan matters on which plan sponsors didn’t spend a whole lot of time. Lately, however, that's not the case. Located at: Retirement Plan Blog, April 2009. Click on headline for full article.

Hardship Withdrawals and the Mortgage Crisis - Summary: Hardship withdrawals from Vanguard DC plans rose in 2006 and 2007, although the absolute level of withdrawals is still quite low. The increase may be correlated with either the emerging home mortgage crisis or broader economic stress among financially vulnerable plan participants. Located at: Vanguard Center of Retirement Research , April 2008. Click on headline for full article.

Helping Employees Understand the Pros, Cons of Hardship Withdrawals - Summary: Some companies offer hardship withdrawals in lieu of loans against the retirement plan. Typically, the withdrawal is processed after the employee requests it with no questions asked. So, how can education be used as a gatekeeper and to help employees become aware of the pitfalls and their alternatives? Located at: Financial Finesse , December 2005. Click on headline for full article.

Hardship Withdrawals Give Access to 401k Savings, But at a Cost - Summary: If you're in a financial pinch, you might be able to tap your 401k for a bailout -- but it could really cost you. Located on: 401khelpcenter.com, December 2002. Click on headline for full article.

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